1. Field of the Invention
The present invention relates generally to electronic transactions and more particularly to a transaction switch and a method of use thereof.
2. Description of Background Information
In a world where electronic financial transactions have become a norm, several different payment options have become available for consumers, namely, credit cards, debit cards, private label cards, pre-paid cards, loyalty cards and affinity cards, to name a few. At the same time, there are various organizations such as Visa, MasterCard and Discover that license different institutions to issue cards with their brand names. Due to the proliferation of institutions issuing cards and merchants accepting payment by these cards, a third party or an acquirer, as it is commonly referred to in the payment service industry, acting as an intermediary between merchants and various institutions representing the different card issuers is typically needed as a clearing house and for handling the various payment options.
An acquirer relies on a transaction switch to route transactions received from merchants. The operation of a typical switch is described with reference to FIG. 1. A merchant initiates a payment transaction, which is routed to an appropriate financial institution for approval. The response from the financial institution is conveyed to the merchant via the switch. However, conventional switches suffer from two primary limitations. First, conventional switches do not support composite transactions. Second, conventional switches require code changes in order to specify new rules for a transaction and to add new payment types. The result of both of these limitations is a delay in processing the transaction.